How accurately does the Dwarf’s journal describe the Dwarf’s feelings? Does it describe his feelings accurately because a journal is normally not meant for other people?

Since The Dwarf is written as a series of journal entries from the title character's point of view, I would contend that it is an accurate depiction of the Dwarf's feelings. Throughout the short book, the Dwarf is very candid about his feelings and opinions. He states plainly his opinions about the other characters in the story. We can assume that the journal serves as a reliable insight into Dwarf's mind, particularly from passages in which he admits something to the reader which he would most likely have hidden from the other characters.
One example of this is his feelings towards Princess Teodora. His feelings concerning Teodora are quite jumbled but overall very negative. He writes that he hates her and would like nothing better than to see her tortured and dead, even though he outwardly does everything she asks and would even risk his life for her. Clearly, he would never express these feelings out loud. First off, they would show his own personal weakness, but more to the point, such opinions would likely get him killed.
Even though we can trust the narration to be reliable as far as the Dwarf's feelings are concerned, we should not trust the Dwarf to be a completely reliable narrator. We see things from his point of view, not how things actually are. For instance, the Dwarf frequently overstates his importance in the Court. He seems to think that the goings on in the Court revolve completely around him. However, if any of the other characters were asked, they most definitely would disagree. Essentially, the journal format of this story shows us what the Dwarf, a truly duplicitous character, is really thinking and feeling since it would be indiscernible through studying his actions and words alone.